Selling by clicks or leasing by bricks? A dynamic game for pricing durable products in a dual-channel supply chain

Kalantari, Solaleh Sadat; Esmaeili, Maryam; Taleizadeh, Ata Allah

doi:10.3934/jimo.2021221

Cited by 14 publications

(7 citation statements)

References 52 publications

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“…By applying Equation (28), we can determine that the value range for λ is 0.01 < λ < 0.49. Furthermore, by utilizing Equations ( 29) and (30), we can obtain the range of the compensation proportional coefficient:…”

Section: Determining the Value Range Of λ And Fmentioning

confidence: 99%

“…To address the challenge of reducing carbon emissions, countries worldwide have implemented various carbon policies, including carbon taxes, carbon quotas, and carbon trading. Among these policy instruments, carbon tax is widely recognized as an effective tool to improve energy efficiency and mitigate environmental pollution [30][31][32]. However, the introduction and implementation of carbon tax policies have imposed significant economic pressure on manufacturers of high-carbon products, potentially hindering their acceptance and implementation [33,34].…”

Section: Introductionmentioning

confidence: 99%

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Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

Yin,

Fang,

Zhang

et al. 2023

Buildings

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Promoting sustainable production and consumption practices in the construction machinery industry is crucial for achieving energy savings and reducing carbon emissions. However, there is a lack of targeted studies addressing the challenge of scaling up leasing and recycling while maximizing economic benefits for enterprises. To fill this gap, this paper presents a lease-oriented closed-loop supply chain model that incorporates a carbon tax policy to investigate the impact of the carbon tax rate and consumer preferences for remanufactured products on the supply chain and introduces a leasing compensation–cost apportioning combined contract to achieve supply chain coordination in the construction machinery sector. The model considers differential selling and leasing prices for new and remanufactured products, as well as the recovery rate, under both centralized and decentralized decision-making approaches. The study explores the interrelationships between various parameters through sensitivity analysis and numerical simulation. The results demonstrate that within a certain range of the cost apportioning proportional coefficient and leasing compensation proportional coefficient, the combined contract can lead the supply chain to achieve Pareto optimality. As the carbon tax rate increases, it was observed that the profits for all parties in the supply chain tend to decrease. However, due to the increased demand for remanufactured products, the product recovery rate improves, resulting in a reduction in total carbon emissions in the closed-loop supply chain of construction machinery. Moreover, the profits of all parties and the total supply chain profits initially decrease and then increase with an increasing preference coefficient for remanufactured products among consumers. By leveraging these factors and adopting effective strategies, such as enhancing consumer recognition of remanufactured products and optimizing pricing and cost allocation, it is indeed possible for the profits of all parties and the total profits in the supply chain to surpass the initial values, even in the face of increasing carbon tax rates. This demonstrates the potential for aligning sustainability objectives with economic benefits in the construction machinery industry.

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Section: Determining the Value Range Of λ And Fmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

Yin,

Fang,

Zhang

et al. 2023

Buildings

View full text Add to dashboard Cite

show abstract

“…Bhaskaran and Gilbert [17] studied the competition between dealers when a manufacturer leases and sells its goods through multiple dealers, and one of their interesting findings is that the manufacturer prefers to use leasing-brokering arrangement. Kalantari et al [18] discussed pricing policies by a manufacturer that sells its products online and whether these policies motivate a retailer as an independent part to enter the market to provide selling and leasing options through a brick store. Additionally, numerous studies investigated the channel problem of leased used products in the secondary market [19][20][21][22][23].…”

Section: Product Leasingmentioning

confidence: 99%

How Does the Electronic Products Retailer Transform Operational Modes Considering Consumer Preferences for Leasing?

Tian

2022

Mathematical Problems in Engineering

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Consumer interest in renting brand-new electronic products has increased recently. Some retailers started to lease them, but they remarkably depreciate shortly after leasing. If their rental income cannot bring in enough profit, should a retailer lease them? This paper uses consumer preferences for leasing to describe their rental utility. It develops an analytical framework to study how the retailer selects operational modes. In a supply chain consisting of a manufacturer and a retailer, three different operational modes are analyzed: pure selling (S), pure leasing (L), and hybrid selling-leasing (SL). Results mainly show that when consumer preferences for leasing exceed a certain threshold, both the manufacturer’s and the retailer’s profits can be increased if the retailer transforms the business operational mode from S to SL/L. When consumer preferences for leasing are within a certain range, the retailer’s profits can be increased if the operational mode is transformed from S/L to SL. This happens as both consumers’ lease and purchase requirements for electronic products are met after the transformation. The wholesale price, leasing price, selling price, and the manufacturer’s profit all rise in the SL mode as consumer preference for leasing rises, but the retailer’s profit falls. Only if the retailer cooperates with the manufacturer can the operational mode be transformed from S/L to SL when consumer preferences for leasing are lower, and the coordination contract can achieve Pareto improvement in the profits of both the manufacturer and the retailer.

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“…Taleizadeh and Mokhtarzadeh [8] used a value-at-risk approach to address pricing and warranty policy optimization problems when manufacturers use online and offline channels to sell products and offer warranty policies for products sold through online channels. Kalantari et al [9] used dynamic games to investigate the optimal pricing strategy problem in the second-hand market by considering a supply chain environment composed of a manufacturer and a retailer. e results show that a rich brand image is always beneficial to manufacturers and retailers and that improving physical utility can increase the demand for leased products, prompting retailers to actively participate in the market.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing and Assortment Decision of Competitive Omnichannel Selling Strategy: Considering Online Return Cost

Huang

Guo²

2022

Mathematical Problems in Engineering

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In the age of new retailing, consumers are discovering brands in new ways and seeking new conveniences to guide their purchasing decisions. Increasingly, retailers are offering consumers a cohesive and comprehensive experience across digital and physical touchpoints by integrating online and offline channels. This study considers a competitive market structure with two retailers selling four products via both online and offline channels. The retailers act as the decision maker of both the product assortment strategy and pricing strategy. Consumers are heterogenous in their horizontal fitness regarding each product, while they are common in the return probability when facing a deceptive product. Consumers’ purchase decision of whether to purchase through physical stores or online stores and making a purchase from which retailers depend on not only the product assortment strategies across competitive retailers but also the return cost that the consumers are faced with if product return happens. Results show that the online product return cost plays an important role in the retailers’ optimal pricing strategy design and product assortment strategy design. To be specific, the optimal prices of products that are sold through the online channel first increase in the return cost of the online product and then decrease it; while the optimal prices of products sold offline are always increasing in the online product return cost. Moreover, no matter what placement strategy sellers will choose, the optimal profit of both sellers is first decreasing the return cost of the online product and then increasing it. Our analyses also depict a two-dimensional market structure by considering sellers’ return costs and consumers’ misfit costs to investigate the optimal selling strategies under the cross-channel shopping platform.

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Selling by clicks or leasing by bricks? A dynamic game for pricing durable products in a dual-channel supply chain

Cited by 14 publications

References 52 publications

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

Pricing and Coordinating the Lease-Oriented Closed-Loop Supply Chain for Construction Machinery in the Era of Carbon Tax

How Does the Electronic Products Retailer Transform Operational Modes Considering Consumer Preferences for Leasing?

Pricing and Assortment Decision of Competitive Omnichannel Selling Strategy: Considering Online Return Cost

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